Which of the following is the equation of the Security Market Line (SML) ?

CS Executive · Financial and Strategic Management · PYQS · December 2020
Which of the following is the equation of the Security Market Line (SML) ?
(A) R i + R F (R m - R F )
(B) R i = R F (R m - R F )
(C) R i = R F + β i (R F - R m )
(D) R i = R F + β i (R m - R F )

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Management

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